NTL goes on spending spree

Cable TV and telecoms operator NTL has spent £940m on acquisitions which show the company's refusal to be outpaced by rivals Cable & Wireless Communications (C&WC) and Telewest. NTL has agreed to buy ComTel - currently owned by Dutch telco KPN - for £550m, and Diamond Cable for £390m.

John Matthews, principal consultant at Ovum, said consolidation in the industry is inevitable. "This deal is all about getting franchises, and NTL increasing its customer base," he said. After Telewest acquired General Cable last month for £649m, it became the UK's largest cable operator, closely followed by C&WC. Although in third place, NTL is now close to the other two in size.

Barclay Knapp, NTL's chief executive, said: "NTL has moved to the forefront of the UK telecoms industry. We will now cover 25 per cent of the UK with a total of 5.2 million homes under franchise, nearly 850,000 residential telephony customers, more than 700,000 CATV customers, more than 85,000 business telephony lines and $1 billion in annualised revenues."

Matthews added: "This shows the extent to which the industry has changed. Most entrants originally aimed to provide TV services locally, and now it's all about telecoms. These companies have to be big to compete with BT."